Blount Announces Third Quarter 2014 Results

PORTLAND, Ore., Nov. 5, 2014 -- Blount International, Inc. today announced results for the third quarter ended September 30, 2014.

Results for the Quarter Ended September 30, 2014

Sales in the third quarter were $245.2 million, an increase of $14.6 million or 6.3 percent compared to the third quarter of 2013. Operating income for the third quarter of 2014 was $23.5 million compared to $15.6 million in the same quarter last year. Third quarter net income was $16.1 million, or$0.32 per diluted share, compared to $7.7 million, or $0.15 per diluted share, in the third quarter of 2013.

"We performed well in the third quarter and demand continued to be strong across most geographic regions," stated Josh Collins, Blount's Chairman and CEO. "With the improved demand, our strong focus on Operational Excellence, and our other targeted cost-reduction initiatives, we expect to be toward the high end of the 2014 targets we outlined last quarter."

Blount operates primarily in two business segments - the Forestry, Lawn, and Garden ("FLAG") segment and the Farm, Ranch, and Agriculture ("FRAG") segment. The Company reports separate results for the FLAG and FRAG segments. Blount's Concrete Cutting and Finishing ("CCF") business is included in "Corporate and Other."

Forestry, Lawn, and Garden

The FLAG segment had third quarter 2014 sales of $159.1 million, which was $9.6 million higher than the third quarter of 2013. Sales volume increases were partially offset by a reduction in average prices. Third quarter 2014 sales increased in all geographic regions except Asia, with North America generating approximately seven percent growth and Europe and Russia achieving approximately 10 percent growth. Asia sales were down one percent compared to the third quarter of 2013. Lower average prices partially offset the effect of increased volumes as a result of a higher mix of sales to original equipment manufacturers and targeted price reductions in certain geographic markets. The change in segment sales for the comparable third quarter periods is illustrated below.

Change in FLAG Segment Sales
(In millions; amounts may not sum due to rounding)	Sales	Change
Third quarter 2013	$ 149.5
Increase / (Decrease)
Foreign Exchange	0.1	0.1%
	149.6	0.1%
Unit Volume	11.5	7.7%
Selling Price / Mix	(2.0)	(1.3)%
Third quarter 2014	$ 159.1	6.4%

Segment backlog was $135.7 million at September 30, 2014, an increase of 17% from $115.9 million on September 30, 2013. The increase in backlog was driven mostly by increased saw chain demand compared to the prior year.

Segment contribution to operating income and Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization, and certain charges ("Adjusted EBITDA") was $26.5 million and $33.8 million, respectively, for the third quarter of 2014, and includes $7.5 million of allocated shared services expenses. Contribution to operating income improved 22.7 percent and Adjusted EBITDA improved 18.5 percent for the third quarter of 2014 versus the third quarter of 2013. The change in FLAG contribution to operating income for the comparable third quarter periods is presented below. 

Change in FLAG Segment Contribution to Operating Income and Adjusted EBITDA
(In millions; amounts may not sum due to rounding)
	Contribution to Operating Income	As a Percent of Segment Sales	Depreciation, Amortization, and Other	Adjusted EBITDA	As a Percent of Segment Sales
Third quarter 2013	$ 21.6	14.5%	$ 6.9	$ 28.5	19.1%
Increase / (Decrease)
Steel Costs	(1.4)
Foreign Exchange	0.4
	20.6	13.8%
Unit Volume	4.8
Selling Price / Mix	(2.0)
Costs / Mix	3.0
	26.4	16.6%
Acquisition accounting(1)	0.1
Third quarter 2014	$ 26.5	16.7%	$ 7.2	$ 33.8	21.2%
(1) Represents change in non-cash acquisition accounting impact for all FLAG business units

Segment contribution to operating income and Adjusted EBITDA improved primarily due to higher sales volumes, a more efficient cost profile, and favorable foreign exchange rates. Increased steel costs and the impact of lower average prices and mix slightly offset the improvements in those areas.

The closure of a higher cost FLAG manufacturing plant announced in mid-2013 and higher plant utilization rates (88 percent in the third quarter of 2014 compared to 71 percent in the third quarter of 2013) contributed to improved overall operating efficiency.

The manufacturing cost improvement was partially offset by an increase in SG&A spending, driven by incentive compensation expense as 2014 results compare more favorably to target than in 2013, increased advertising costs, and additional training, travel, and relocation expenses. 

Farm, Ranch, and Agriculture

The FRAG segment reported third quarter 2014 sales of $78.6 million, an increase of $4.3 million from the third quarter of 2013, mainly due to improved sales volumes and stronger average pricing. Sales volumes increased primarily as a result of continued strong sales of log splitters compared to the prior year. The change in segment sales for the comparable third quarter periods is illustrated below.

Change in FRAG Segment Sales
(In millions; amounts may not sum due to rounding)	Sales	Change
Third quarter 2013	$ 74.3
Increase / (Decrease)
Foreign Exchange	0.1	0.1%
	74.4	0.1%
Unit Volume	3.7	5.0%
Selling Price / Mix	0.5	0.7%
Third quarter 2014	$ 78.6	5.8%

Segment backlog was $32.0 million at September 30, 2014 compared to $31.0 million at September 30, 2013. The FRAG segment had $7.8 million of Adjusted EBITDA in the third quarter of 2014. FRAG segment contribution to operating income was $2.2 million after $4.0 million of depreciation and amortization expense, $2.3 million of allocated shared services expenses, and a $1.4 million non-cash charge related to impairment of an acquired trade name. The change in the third quarter 2014 contribution to operating income compared to the third quarter of 2013 is presented below.

Change in FRAG Segment Contribution to Operating Income and Adjusted EBITDA
(In millions; amounts may not sum due to rounding)
	Contribution to Operating Income	As a Percent of Segment Sales	Depreciation, Amortization, and Other	Adjusted EBITDA	As a Percent of Segment Sales
Third quarter 2013	$ 4.4	5.9%	$ 4.5	$ 8.9	12.0%
Increase / (Decrease)
Steel Costs	—
Foreign Exchange	—
	4.4	5.9%
Unit Volume	1.1
Selling Price / Mix	0.5
Costs / Mix	(2.8)
	3.3	4.3%
Acquisition accounting(1)	0.3
Impairment of Acq. Intangibles	(1.4)
Third quarter 2014	$ 2.2	2.8%	$ 5.5	$ 7.8	9.9%
(1) Represents change in acquisition accounting impact for all FRAG business units

The benefit of improved sales volumes and average pricing were more than offset by higher costs in the FRAG segment, mainly in the areas of manufacturing, distribution, and supplier purchased components. Product costs were unfavorable compared to the third quarter of 2013 as a result of higher procurement costs on certain parts, higher labor costs driven by overtime, and additional spending in SG&A. Also, product sales mix in the third quarter of 2014 included relatively lower margin products compared to 2013.

Corporate and Other

Corporate and Other generated net expense of $5.2 million in the third quarter of 2014 compared to net expense of $10.4 million in the third quarter of 2013. Third quarter 2014 net expense was smaller due to the absence of $4.6 million in restructuring charges experienced in the third quarter of 2013 related to the closure of a saw chain manufacturing facility in Portland, Oregon and the related consolidation of production into other FLAG forestry facilities. 

Net Income

Third quarter 2014 net income increased primarily due to higher overall operating income in the third quarter of 2014 compared to 2013. Net interest expense decreased $0.8 million to $4.1 million in the third quarter of 2014 as a result of lower average borrowing levels. Other income improved$4.2 million primarily as a result of foreign exchange impacts on non-operating assets. Additionally, the effective income tax rate increased as the prior year benefited from the expiration of the statute of limitations in certain tax jurisdictions and release of the related income tax on uncertain tax positions. The change in net income for the third quarter of 2014 compared to the third quarter of 2013 is summarized in the table below.

Change in Consolidated Net Income
				Diluted
(In millions, except per share data;		Income Tax	Net	Earnings per
amounts may not sum due to rounding)	Pre-tax Income	Effect	Income	Share
Third quarter 2013 Results	$ 9.5	$ 1.8	$ 7.7	$ 0.15
Change due to:
Increased operating income excluding acquisition accounting	9.1	1.7	7.4	0.15
Acquisition accounting	(1.2)	(0.2)	(1.0)	(0.02)
Decreased net interest expense	0.8	0.1	0.6	0.01
Change in other expense	4.2	0.8	3.4	0.07
Change in income tax rate	—	2.0	(2.0)	(0.04)
Third quarter 2014 Results	$ 22.4	$ 6.3	$ 16.1	$ 0.32

Cash Flow and Debt

As of September 30, 2014, the Company had net debt of $351.1 million, a decrease of $44.1 million from December 31, 2013 and a decrease of $53.8 million compared to September 30, 2013. The decrease in net debt since December 31, 2013 was primarily the result of generating free cash flow of$51.9 million during the first nine months of 2014. Third quarter 2014 free cash flow generation was $37.9 million compared to $56.1 million in the third quarter of 2013. The decrease in free cash flow in the third quarter of 2014 as compared to 2013 was the result of a large conversion of working capital to cash in 2013 and an increase of $5.2 million in capital spending in 2014, mostly on capacity improvements in China and Canada. The Company defines free cash flow as cash flows from operating activities less net capital spending. The ratio of net debt to last-twelve-months ("LTM") Adjusted EBITDA was 2.7x as of September 30, 2014, which is an improvement compared to December 31, 2013 and reflects lower net debt and increased Adjusted EBITDA.

2014 Financial Outlook

The Company has updated its outlook for sales and free cash flow while maintaining its outlook for Adjusted EBITDA. Sales are expected to range between $940 million and $950 million, Adjusted EBITDA between $135 million and $140 million, and operating income between $81 million and $86 million. Our expectation for sales assumes growth in FLAG segment sales of between four and five percent and growth in FRAG segment sales of between five and six percent, both compared to full year 2013 levels. In 2014, operating income is expected to experience benefit from foreign currency exchange rates of between $2 million and $3 million, and steel costs are expected to have a $3 million to $4 million unfavorable impact for the year compared to 2013. The 2014 operating income outlook includes non-cash charges of approximately $13 million related to acquisition accounting. Free cash flow in 2014 is expected to range between $42 million and $48 million, after approximately $40 million to $42 million of capital expenditures. Net interest expense is expected to be between $17 million and $18 million in 2014, and the effective income tax rate is expected to be between 31 percent and 34 percent in 2014.

A comparison of key operating indicators for 2013 actual results and the 2014 outlook mid-point is provided in the table below.  

(In millions)	2013 Actual	2014 Outlook Mid-Point
Sales	$ 900.6	$ 945.0
Operating Income(1)	37.5	83.5
Adjusted EBITDA	123.5	137.5
Free Cash Flow	67.6	45.0
Net Capital Expenditures	29.4	41.0
Net Debt at Period End	395.2	357.5
Net Debt/Adjusted EBITDA	3.2x	2.6x
(1) 2013 Actual Operating Income includes a $24.9 million non-cash charge related to impairment of certain acquired intangible assets

Blount is a global manufacturer and marketer of replacement parts, equipment, and accessories for consumers and professionals operating primarily in two market segments: Forestry, Lawn, and Garden ("FLAG"); and Farm, Ranch, and Agriculture ("FRAG"). Blount also sells products in the construction markets and is the market leader in manufacturing saw chain and guide bars for chain saws. Blount has a global manufacturing and distribution footprint and sells its products in more than 115 countries around the world. Blount markets its products primarily under the OREGON^®, Carlton^®, Woods^®, TISCO, SpeeCo^®, ICS^® and Pentruder^® brands. For more information about Blount, please visit our website at http://www.blount.com.

Briggs and Stratton Set to Add 135 Jobs

October 30 -- Briggs and Stratton Corp., which makes engines for outdoor power equipment, will begin hiring for 135 full-time jobs as it moves production from a plant in Georgia to Wisconsin.

Wauwatosa-based Briggs and Stratton  expects to add a total of 220 full-time positions and 150 temporary seasonal workers to its facility in Wauwatosa. The additional hiring is expected to happen early next year.

In July, Briggs announced that it would close its plant in McDonough, Ga., and start producing pressure washers, snow throwers and tractors at the plant in Wauwatosa.

The company already has moved some of its manufacturing and assembly lines to Wisconsin.

Laura Timm, vice president of corporate communications and public affairs with Briggs and Stratton, said the new hires would begin work between January and March. The company is hiring assembly workers, machine operators, forklift/material handling staff, set up technicians, welders, maintenance workers and technicians.

The company's hiring team plans to screen applications, and qualified individuals will be contacted to attend an invitation-only job fair at the Wauwatosa campus.

Denise Lockwood       www.bizjournals.com/milwaukee  

UW-Whitewater Alum Shares Journey of Success

October 29 -- UW-Whitewater alumnus Aaron Jagdfeld has reached the heights that many people only dream of.

Jagdfeld, CEO of Generac, is a Milwaukee native who graduated from UW-Whitewater in 1993 with an accounting degree. He started his career at the public accounting firm, Deloitte. After spending a year in public accounting, he decided to join Generac.

He held different positions in the accounting department at Generac, and moved his way up to becoming the Chief Financial Officer (CFO) of the company. He became the CEO in 2008. Jagdfeld was recognized by Forbes magazine as one of America’s 20 most powerful entrepreneurs under 40 years of age.

He was invited by UW-Whitewater Innovation Center to talk about his journey and the story of Generac.

History of Generac

Generac is a manufacturing company that primarily manufactures residential, commercial and industrial products. It was the first to “engineer” home standby generators and is now the number one manufacturer of home backup generators, according to its website.

The company was founded by Bob Kern in 1959, who led the company until it was sold in 2006. He retired when he was 82 years old, Jagdfeld said.

Generac had humble beginnings, according to Jagdfeld. When Kern started the business, he was unable to pay the rent of the building, which got him evicted off the facility. He then moved to a different location to operate his business.

The company saw several bumps in the road even decades after its founding. Kern faced financial troubles during the early ’80s. He told Jagdfeld that he had less money in 1982, than he had in 1959 when he started the company.

Despite difficulties, Kern did not give up. He had a “never say die attitude” which kept him going, Jagdfeld said.

“He was in his 50s and he didn’t give up; it would have been easy to take a job  at Walmart or something, but he didn’t give up on it, and 30 years later his business is worth $2 billion,” Jagdfeld said.

“When I started the company we had 80 million dollars in sales, we had about 250 employees and that’s very different from today,” Jagdfeld said.

Generac operates with 3,400 employees and billions in sales.

Success strategy of Generac

Jagdfeld credits two things to Generac’s success: Innovation and acquisitions.

“You have got to constantly reinvent yourself, Jagdfeld said. “Just having one idea is a great way to start, but it’s not a very good way to finish.”

Generac was operated “organically” under Kern, according to Jagdfeld. The company did not do acquisitions until 2011.

“We turned to acquisitions to really broaden our portfolio, broaden the markets we are involved with, broaden our geographic scope which is really hard to do organically,” Jagdfeld said. “It’s one thing to grow organically in the U.S. it’s another thing to try and to grow organically in Europe, China, India, Italy or elsewhere.”

Jagdfeld emphasized that the key to a company’s success is continuous innovation.

“The reason we got to $2 billion was not because of the products we made in ’50s, it wasn’t because of the products in ’60s, ’70s or the ’80s; it was new products all the time,” Jagdfeld said.

He also said Generac follows a strategy called “Powering Ahead” which has been the basis for his company’s growth for the past 4 years.

“If you want your employees, your suppliers, your customers, your investors to understand what it is that you are doing, you have to be able to give your elevator speech,” Jagdfeld said. “You have 30 seconds to tell them what your strategy is and so the key to that is keeping the strategy very simple but broad enough that allows you enough flexibility to be able to grow organically and in our case inorganically through acquisitions.”

He said he tells his employees that if they start getting tired of hearing his strategy, it means it’s working.

Secret of Jagdfeld’s success

Success is hard work and having a strong work ethic. He said he strongly believes in making his own luck.

Jagdfeld said it was “cool” to receive recognition from Forbes, but there is one other achievement he is very proud of.

The alum was also a Track and Field athlete at UW-W, which he still values to this day.

“The only award I would say probably rivals that [Forbes] is the my Whitewater Athletic Achievement award,” Jagdfeld said. “I had a decent career. It was cool to be able to have that kind of recognition from the athletic department here.”

He said most sports in college are all-year round, incuding track, and being able to balance sports with college and succeed at both is more of a challenge than one thinks.

Jagdfeld said his comapny has recently bought a facility in Oshkosh. It has also acquired a facility in Nebraska, South Dakota, and Georgia.

Generac has plants in foreign countries such as Brazil, Italy and United Kingdom too.

“We are starting to expand our business outside of USA, but those are only about 14 percent of our revenues outside North America,” Jagdfeld said. “We have a long way to go to be a really, truly international business, but we are acquiring our way there and kind of growing into that.”

Jagdfeld said the company was made public in 2010 and is now traded on New York Stock Exchange.

Rumasa Noor      http://royalpurplenews.com/

Stihl Uses Marketing Analytics to Compete With Big Box Stores

October 29 -- If you're in the market for a chain saw or a leaf blower, you might consider a product from Stihl.

But you won't find the company's products at Home Depot or Lowe's. Stihl operates an independent dealer-only retail distribution program that its leaders say is instrumental in helping the company dominate the gasoline powered outdoor tool category.

But that tactic means Stihl is one step removed from the marketplace. "It's hard for us to get close to the customer," says Ken Waldron, director of marketing. That made it difficult for Waldron, who came from the automotive industry, to prove the returns on his marketing investments.

"When you're working for Chevrolet, you can see very quickly every Monday how many Cavaliers were sold, to whom and in what geography," Waldron says. "It wasn't until I came here that I realized that was a luxury."

Stihl must collect data from many sources, some more complete than others. There is no big market researcher for gas-powered outdoor tools and independent dealers all track sales differently. Stihl belongs to the Outdoor Power Equipment Institute, whose members report on U.S. shipments to wholesalers and retailers. Other third-party research companies track retail sales. And Stihl itself collects product registration and warranty card data. "It takes a bit of doing to understand your performance," Waldron says.

Last year, Stihl deployed Eye on Marketing ROI software from Black Ink to begin analyzing the more than 10 million customer records it has generated since 2000. The goal is to find historical sales trends and help its thousands of independent dealers as they compete with industry Goliaths for customer attention.

In a new program, Stihl has coaxed 5,000 of its retailers to participate in regional marketing campaigns, in part to show potential customers there's an alternative to the big box stores. "We're marshaling this army of retailers who see Home Depot and Lowe's as the enemy," Waldron says. "All of them want to better understand their return on marketing effort." Stihl's analytics will give them "more reason to believe in what we're doing in the face of enormous category killers," he says.

In-depth customer data analysis can raise marketing's profile inside a company, says Laura Ramos, an analyst at Forrester Research. "Better use of data and reporting helps marketers make the transition from the role of brand center to the source of insight."

Stihl identified two customer types: "Eddy Expert," the baby boomer who is familiar with the brand but may soon be aging out of its products, and "William Wannabe," the Generation X or millennial homeowner who represents the next wave of potential Stihl customers.

Stihl has historically focused on boomers. But analysis revealed that if the company had redirected some recent marketing programs to target 30-to-40-year-olds, it could have captured over $200 million in additional sales at retail by increasing the number of customers it has in that age group by just a couple percent, Waldron says.

Such analytics will drive changes in marketing strategies at distributor stores and loyalty programs in 2015. The "ability to profile who is buying, when they are buying and where they are buying, in a far more granular fashion, will allow us to better target our media and messaging investments," Waldron says. "The notion of effective micro-marketing against specific audience segments is no longer fantasy, it is reality."

Stephanie Overby         www.cio.com

ARI Network Services Announces Fiscal 2014 Results

MILWAUKEE -- October 28 -- ARI Network Services, an award-winning provider of data-driven software tools and marketing services that help dealers, distributors and manufacturers Sell More Stuff!™, reported financial results today for its fiscal fourth quarter and fiscal year ended July 31, 2014.

Highlights for the fiscal year 2014 included:

The company reported record revenues of $33.0 million, a 9.7% increase over fiscal year 2013.

Recurring revenues for fiscal 2014 were $30.9 million, a 14.4% increase over fiscal year 2013. As a percentage of total revenues, recurring revenues were 93.6% in fiscal year 2014 versus 89.7% in fiscal year 2013.

EBITDA, a non-GAAP measure, adjusted for non-cash charges, was $3.9 million, or 11.7% of revenue in fiscal year 2014, an increase of 10.4% from fiscal year 2013.

Highlights for the fourth quarter of fiscal year 2014 included:

Revenues for the fourth quarter were $8.5 million, an increase of 4.5% over 3Q14 and 1.1% over the same period last year.

Gross margin was 81.6% in the fourth quarter compared with 80.9% in 3Q14 and 80.8% in the same period last year.

EBITDA, a non-GAAP measure, adjusted for non-cash charges, was $1.4 million or 16.1% of revenue in the fourth quarter. This compares with EBITDA of $1.3 million or 15.4% of revenue in 3Q14 and $1.5 million or 17.7% of revenue in the same period last year.

Cash generated from operations was $1.3 million for the fourth quarter of fiscal 2014, compared with $1.0 million in 3Q14 and $0.9 million for the same period last year.

Fiscal Year 2014 Financials

Fiscal 2014 was a record year for ARI, with revenues of more than $33 million. Total revenue increased 9.7% or $2.9 million during fiscal 2014. Recurring revenues were $30.9 million, a $3.9 million increase over the prior year. The increase in revenue and recurring revenue was primarily driven by growth in the company's website solution offerings, which in fiscal 2014 accounted for 51% of the firm's revenues.

Gross margin for fiscal year 2014 was 80.7% versus 78.0% last year, with the increase being largely attributable to the growth in the firm's recurring revenues which have a higher gross profit.

The company recorded an operating profit of $0.4 million in fiscal 2014 versus an operating loss of $0.2 million in fiscal 2013. Net loss for the fiscal year was $102,000 or ($0.01) per share, compared with a net loss of $753,000 or ($0.08) per share last year.

Management Discussion

Roy W. Olivier, President and Chief Executive Officer of ARI, commented, "Fiscal 2014 was a year of growth and accomplishments for ARI. We recorded the highest revenue in company history and were able to grow EBITDA 10% versus the prior year. In the early part of our fiscal year, we acquired DUO Web Solutions and through that were able to re-launch our Digital Marketing Services offering, which we expect to be one of our key drivers of organic growth in fiscal 2015.

In December of 2013, we successfully re-listed on the Nasdaq Capital Market and recently were added to the Russell Microcap Index. Throughout the year, we were also able to enhance our product offerings and expand our customer base in our primary growth verticals of automotive tire and wheel and home medical equipment, which we entered during fiscal 2013."

Mr. Olivier continued, "Subsequent to the end of our fiscal year, we completed the acquisition of TCS Technologies. This acquisition further solidifies our leadership position in the automotive tire and wheel industry and expands our product offerings. We are excited about the growth prospects of this acquisition as we look ahead to fiscal 2015."

William Nurthen, Chief Financial Officer of ARI, commented, "The company experienced marked improvement in profitability and cash flow in the back half of fiscal 2014. EBITDA for the third and fourth quarters of fiscal 2014 were 15.4% and 16.1%, respectively, and the fourth quarter performance was inclusive of more than $100,000 in charges related to the company's acquisition of TCS. In addition, cash flow from operations for the last two quarters combined was $2.4 million which was the best six-month performance in the company's history."

Kathie Buono to Become Briggs and Stratton's VP, Secretary and General Counsel

October 27 -- Kathie Buono, who was named managing partner of Quarles and Brady LLP's Milwaukee office in March, will join Briggs and Stratton Corp. in February 2015 as vice president, secretary and general counsel, replacing the retiring Robert Heath.

Buono, 53, is one of the highest-profile women among Milwaukee's largest law firms and worked more than 28 years at Quarles, primarily in the corporate services practices group. She succeeded Ann Murphy as the Milwaukee office's managing partner.

Briggs and Stratton is one of Buono's clients.

"It was obviously sudden and unexpected," Buono said Monday of her latest career move.

She declined further comment and deferred further questions to Briggs and Stratton, the Wauwatosa-based manufacturer of small-engines, generators and lawn-and-garden equipment. Buono's role as an outside counsel to Briggs has included securities and acquisitions work, said Briggs spokeswoman Laura Timm.

"We know how well-qualified she is and she'll be a tremendous asset to Briggs and Stratton," Timm said.

Buono said she will remain at Quarles and Brady through the end of 2014. There was no immediate word on her successor as managing partner at the Milwaukee office, which is metro Milwaukee's second-largest law firm.

Heath, 66, will remain at Briggs and Stratton for the transition to Buono through June 2015.

Heath has been vice president and general counsel of Briggs since 2001 and was named secretary in 2002.

www.bizjournals.com    

The Toro Company to Acquire Boss Professional Snow and Ice Management Business

BLOOMINGTON, Minn.-- Oct. 27, 2014-- The Toro Company today announced that it has entered into a definitive agreement to acquire the BOSS^® professional snow and ice management business of privately-held Northern Star Industries, Inc. The transaction is subject to customary closing conditions, including regulatory approvals, and currently is expected to close during Toro’s fiscal 2015 first quarter.

Based in Iron Mountain, Michigan, BOSS designs, manufactures and sells snowplows, salt and sand spreaders, and related parts and accessories, for light and medium duty trucks, ATVs, UTVs and loaders. BOSS sales in 2014 are anticipated to be approximately $125 million. To learn more about BOSS, visit www.bossplow.com.

“With the addition of BOSS to our existing market-leading professional contractor businesses, we are even better positioned to strengthen and grow our relationships with these important customers by providing them with the innovative and durable equipment and high-quality service they need for each season,” said Michael J. Hoffman, Toro’s chairman and chief executive officer. “We’ve long been interested in the professional snow and ice management category. We are impressed with BOSS’ solid business performance and we are optimistic about the opportunities for growth through product line expansion and in international markets.”

“Through this acquisition, we will gain another strong professional contractor brand, a portfolio of reliable counter-seasonal equipment, efficient manufacturing operations and a well-established and broad North American distribution channel for these products,” said Hoffman. “In addition, BOSS brings a talented and experienced management team, a passionate and dedicated team of employees and a culture of innovation and customer service that is similar to our own.”

“As a privately-held business in a smaller community, it is essential to us that BOSS transition to a company that not only is well-positioned to take us to the next level but also shares our commitment to innovation, customers, employees and the communities in which we live and work,” said David Brule II, President of BOSS. “We are impressed with Toro, its rich 100 year history and consistent record of performance. Overall, it is a great fit for us. On behalf of myself and the entire BOSS team, we look forward to the next phase of the BOSS journey as part of the Toro family.”

The purchase price is approximately $227 million, which Toro will pay primarily in cash except for $30 million that will be paid in the form of a three-year unsecured promissory note. Toro plans to fund the cash portion of the purchase price with cash on hand and borrowings under a new five-year unsecured revolving credit facility that includes a senior term loan. Toro expects this acquisition to be slightly accretive to fiscal 2015 earnings.

About The Toro Company

The Toro Company (NYSE: TTC) is a leading worldwide provider of innovative turf, landscape, rental and construction equipment, and irrigation and outdoor lighting solutions. With sales of more than $2 billion in fiscal 2013, Toro’s global presence extends to more than 90 countries through strong relationships built on integrity and trust, constant innovation and a commitment to helping customers enrich the beauty, productivity and sustainability of the land. Since 1914, the company has built a tradition of excellence around a number of strong brands to help customers care for golf courses, sports fields, public green spaces, commercial and residential properties and agricultural fields. More information is available at www.thetorocompany.com.

Husqvarna Interim Report January - September 2014

Stockholm October 22, 2014

Kai Wärn, President and CEO:

“Husqvarna Group’s positive trend from the first half year continued into the seasonally smaller third quarter. Total Group sales increased by 3%, adjusted for changes in exchange rates.

Operating income for the third quarter increased by 46% to SEK 301m (206), and the margin rose to 4.4%, driven by improvements across all business areas. On Group level, the favorable development was supported by reduced material costs, higher sales volume and improved productivity. Cash flow was solid, and the net debt/equity ratio improved to 0.50 (0.57).

From a business area perspective, currency adjusted sales for Americas and Construction increased by 6% respectively, while Europe & Asia/Pacific was flat. In terms of earnings, Europe & Asia/Pacific reported higher results and improved margin, Americas’ turn-around showed steady progress reducing the operating loss in the quarter by more than half, and Construction sustained its profitable growth.

As previously communicated, the Group’s current focus is to increase the operating margin from approximately 5% in 2013 to 10% in 2016. On a year-to-date basis, the operating margin has improved by close to 2 percentage points. The positive development has largely been enabled by a successful execution of the Accelerated Improvement Program, which primarily aims to cut product cost by reducing material costs, and improve product mix by focusing on core brands and on products where the Group has leadership positions.

We are now taking the final steps of preparing for next season. Keeping the momentum in the execution of the Accelerated Improvement Program is the priority for 2015. In parallel, the new brand based organization will be fully operational as of January 1, 2015, and forms the base for taking steps towards expansion beyond 2015.

From a short term demand perspective, we expect the fourth quarter to show a stable development compared to the corresponding quarter prior year.”

Third quarter

Net sales increased to SEK 6,785m (6,349). Adjusted for exchange rate effects, net sales                  increased 3%.
Operating income increased 46% to SEK 301m (206). Sales, operating income and margin                improved for all business areas.
Earnings per share increased to SEK 0.31 (0.16).
Operating cash flow amounted to SEK 1,286 (2,001).
The net debt/equity ratio improved to 0.50 (0.57).

THIRD QUARTER

Net sales

Net sales for the third quarter 2014 increased by 7% to SEK 6,785m (6,349). Adjusted for exchange rate effects, net sales for the Group increased by 3%, 6% for Americas and Construction respectively, while Europe & Asia/Pacific was unchanged.

Operating income

Operating income for the third quarter increased by 46% to SEK 301m (206), corresponding to an operating margin of 4.4% (3.2). Operating income and margin improved for all business areas.

Operating income was positively impacted primarily by reduction of direct material costs, higher sales volume and improved productivity.

Changes in exchange rates had a total negative impact on operating income of SEK -12m compared to the third quarter 2013.

Financial items net

Financial items net amounted to SEK -70m (-111), of which net interest amounted to SEK -89m (-95). The average interest rate on borrowings as of September 30, 2014, was 3.5% (4.4).

Income after financial items

Income after financial items increased to SEK 231m (95) corresponding to a margin of 3.4% (1.5).

Taxes

Tax for the third quarter amounted to SEK -55m (-3).

Earnings per share

Income for the period increased to SEK 176m (92), corresponding to SEK 0.31 (0.16) per share.

JANUARY – SEPTEMBER

Net sales

Net sales for January - September increased by 7% to SEK 27,515m (25,600). Adjusted for exchange rate effects, net sales for the Group increased by 6%, for Europe & Asia/Pacific by 5%, for Americas by 6%, and sales for Construction increased by 8%.

Operating income

Operating income for January – September increased by 35% to SEK 2,588m (1,916) and the corresponding operating margin rose to 9.4% (7.5). Operating income and margin rose for all business areas.

Operating income for the first nine months was positively impacted by the higher sales volume, reduction of direct material costs, improved productivity and favorable mix.

Changes in exchange rates had a total negative impact on operating income of SEK -60m compared to January - September 2013.

Financial items net

Financial items net amounted to SEK -276m (-303), of which net interest amounted to SEK -267m (-290).

Income after financial items

Income after financial items increased to SEK 2,312m (1,613) corresponding to a margin of 8.4% (6.3).

Taxes

Tax amounted to SEK -545m (-393), corresponding to a tax rate of 24% (24) of income after financial items.

PERFORMANCE BY BUSINESS AREA

Europe & Asia/Pacific

Net sales for Europe & Asia/Pacific increased by 3% in the third quarter. Adjusted for exchange rate effects, net sales were unchanged.

Handheld products such as chainsaws, and electrical products including robotic lawn mowers, developed positively in the quarter, while sales of watering products declined, largely as a result of a late season for watering products prior year.

Sales of snow throwers were also down, mainly related to a decline in Russia.

Operating income for the third quarter increased 8% to SEK 309m (285) and the operating margin improved to 9.4% (8.9), mainly driven by reduction of direct material costs.

Changes in exchange rates had a negative year-on-year impact of SEK -14m on operating income in the third quarter and a positive impact of SEK 20m for January - September.

Americas

Net sales for Americas increased by 11% in the third quarter 2014. Adjusted for exchange rate effects, net sales increased by 6%.

Market demand developed favorably in the U.S. Sales increased in the U.S. and Latin America, with a continued positive development in the dealer channel.

The operating loss for the quarter decreased to SEK -55m (-122) and the corresponding margin recovered to -2.1% (-5.2), mainly due to lower direct material costs and the higher sales volume.

Changes in exchange rates had a negative year-on-year effect of SEK -2m on operating income in the third quarter and SEK -63m for January - September.

Construction

Net sales for Construction increased by 11% in the third quarter 2014. Adjusted for exchange rate effects, the increase in sales was 6%.

Sales growth in North America continued to be strong as a result of market share gains and favorable market demand. Sales in Europe also developed positively, while sales in the rest of the world were in line with the corresponding quarter prior year.

Operating income increased to SEK 109m (86), mainly as a result of the higher sales volume and a favorable product mix.

The corresponding operating margin improved to 12.6% (10.9).

Changes in exchange rates had a positive year-on-year effect of SEK 4m

Acquisition Of Assets In Neta Industries (Australia)

Husqvarna Group has acquired the assets of Neta Industries, Pty, Ltd. (“Neta”) for approximately SEK 25m.

Neta has approximately 50 employees and is one of Australia’s leading providers of mobile watering and specialty irrigation products, and will serve as the Group’s platform for the micro-drip irrigation market in Australia.

Financial impact in 2014 will be limited. Acquired sales amount to approximately SEK 100m on an annual basis. The purchase price allocation is preliminary.

Management Change

Ulf Liljedahl, CFO of Husqvarna Group since 2011, has decided to leave the Group as of end of February, 2015. Ulf Liljedahl has been appointed President and CEO of Volito Group. The search for a successor has been initiated.

Generac Acquires Pramac America Assets

October 23 -- Waukesha-based Generac Power Systems has acquired some assets of Kearney, Neb.-based Pramac America LLC, from Siena, Italy-based Pramac Industries Inc.

The transaction price was not disclosed.

Pramac America manufactures and distributes portable generators, water pumps and other related products under the Pramac, Powermate, DeWalt and Porter Cable brands under a licensing agreement with the U.S., Canada and Mexico.

Generac purchased the Powermate brand, working capital and equipment from Pramac. It will also assume the licensing agreement for the DeWalt and Porter Cable brands. The entity will be renamed Powermate America LLC.

Pramac previously announced it will close its Kearney facility. That closure will still happen, Generac said, but it will retain the Marietta, Ga. location and operate the business from there.

Generac acquired the assets to expand its portable engine powered tools offerings.

“It will provide even greater distribution opportunities for both companies and allow Generac to leverage our combined scale and strength to create value for our customers in sourcing, distribution, manufacturing and product design,” a Generac spokesman said.

www.biztimes.com    

Analyst: Briggs and Stratton 'Mixed With Takeaways' on Earnings

October 20 -- Briggs and Stratton Corp., a Wauwatosa-based engine manufacturer, missed on analysts' revenue expectations after reporting its first quarter 2015 earnings, but one analyst pointed to its record level products gross margins as a positive sign for the company.

Timothy Wojs, financial analyst with Robert W. Baird and Co. Inc., Milwaukee, said Briggs and Stratton's earnings report offered somewhat mixed news.

"FQ1 results were mixed with takeaways for both bulls and bears," Wojs wrote. "Bulls likely point to record products gross margin, while bears likely point to another revenue miss."

The company reported a loss of $15.3 million in the first quarter of fiscal 2015, or 34 cents per share, compared with $19.3 million, or 41 cents per share, during the same period last year.

Sales for the first quarter were $292.6 million, a decrease of $24.7 million, or 7.8 percent, compared with the first quarter of fiscal 2014.

Wojs pointed to how analysts' expectations were still relatively low, but that an "upside/downside remains favorable for longer-term, patient investors," he wrote.

Todd Teske , chief executive officer and president of Briggs and Stratton, said its production levels are higher in the current year because it is seeing strong orders for its large engines, which go into riding equipment, it is building inventory for a new small-engine platform, and increasing the inventory from its products group to prepare for the closure of its McDonough, Ga., facility.

Dave Rodgers, chief financial officer and senior vice president of Briggs, said that while the company still reported a loss in earnings, it wasn't as great as last year.

"As a reminder, we typically report a net loss in our first fiscal quarter due to the seasonal nature of our engines business and related lawn and garden portion of our products business," Rodgers said.

With the company realizing savings in its employee retirement plans, streamlining its operations, and the recent acquisition of towable light towers and industrial heater manufacturer Allmand Bros. Inc., Wojs pointed out an upside for long-term investors.

"While we understand the bears' case, our positive stance on the shares is based on our view that expectations are relatively low such that upside/downside remains favorable for longer-term, patient investors. …We see a reasonable range of $16-$26 (per share) in 12 months," he wrote.

Denise Lockwood     www.bizjournals.com

Kohler Engines Names New Pesident

October 21 -- Following former Kohler Engines president Tom Cromwell’s appointment to group president at Kohler Co.’s Power Group in September, the company has promoted Brian Melka to the role of president of Engines Americas.

Melka assumes full responsibility for the engines business in the Americas region, establishing strategic direction, managing operational demands, driving growth and profitability objectives, and attracting and developing talent. In addition, he will have worldwide responsibility for new product development, marketing and overall growth of the gasoline engines product lines. Melka joined Kohler in 2013 in the role of vice president.

Prior to Kohler, he served in numerous senior capacities at Milwaukee-based Rexnord Corp., where he most recently held the role of vice president of global mining and product management. Before joining Rexnord, he spent more than 12 years working for various Rhode Island-headquartered Textron Inc. businesses including Greenlee Textron and Jacobsen Textron.

Melka holds a bachelor’s degree in finance from the University of Wisconsin-Madison and a master’s degree in business administration from the University of Wisconsin-Whitewater.

Kohler Engines manufactures small engines for riding lawn mowers, garden tractors, walk-behind lawn mowers, concrete construction equipment, outdoor power equipment, welders, pressure washers and other products.

Headquartered in Kohler, Kohler Co. is a global leader in the manufacture of kitchen and bath products, engines and power systems, furniture, cabinetry and tile. It also owns and operates two five-star hospitality and golf resort destinations in Kohler and St Andrews, Scotland.

www.biztimes.com        

CPSC, Briggs and Stratton Recall Snaper Rear Engine Riding Mowers

October 15, 2014

Recall Summary

Name of product: Brigg and Stratton Snapper Rear Engine Riding Mower

Hazard: Weld on drive axle can fail resulting in loss of brake control, posing an injury hazard.

Remedy: Repair

Consumer Contact: Briggs and Stratton Corporation at (800) 935-2967 from 7:45 a.m. to 4:30

p.m. CT Monday through Friday, or online at www.Briggsandstratton.com and click on "Recall

Alert Notice" for more information.

Recall Details

Units: About 8,500

Description: This recall involves six models of Briggs and Stratton Snapper Rear Engine Riding

Mowers. The mowers are red with a black fuel tank, steering wheel and seat. The name Snapper

is printed on both sides of the mower. The model and serial numbers are on a label on the engine

platform under the right side of the seat.

The following models and serial number ranges are included.

Model Number              Serial Number Range

7800918                        2016447188 - 2016485206

7800920                        2016443919 - 2016568930

7800932                        2016462619 - 2016481454

7800950                        2016611952 - 2016766052

7800951                        2016624456 - 2016765000

7800954                        2016603229 - 2016775752

Incidents/Injuries: Briggs and Stratton has received two reports of brake failure, related to failed

weld. No injuries have been reported.

Remedy: Consumers should immediately stop using the recalled mowers and contact an

authorized Snapper service dealer for a free repair.

Sold at: Family Farm stores, Power Equipment Direct and Briggs and Stratton Snapper dealers

nationwide from April 2013 through May 2014 for between $1,300 and $2,000.

Manufacturer: Briggs and Stratton Power Products Group, LLC, of Milwaukee, Wis.

Manufactured in: United States